Reason Foundation

Who Will Follow California on the Path to Fiscal Ruin?

According to Newsweek, New York, Florida, Nevada, Illinois and Arizona may be following California on the path to fiscal ruin. Things are bad in these states to be sure, but California is a hard act to top in my mind.

I would offer a counterpoint to its assessment of Arizona however, which starts, "After squandering surpluses by lowering taxes..." Setting aside the question of whether government is spending too much or too little, how is it "squandering" to lower taxes when government is raking in more than it budgeted? And even with tax cuts, spending skyrocketed in Arizona the last several years prior to the current malaise, supported by a bipartisan majority who couldn't resist a spending splurge on the (temporary) revenue gravy train.

It's fairly simple to me. You can't credibly suggest new taxes until you can demonstrate to taxpayers that you've done everything you can with current taxes and that you've cut spending and streamlined to become the leanest, most efficient machine possible.

Policymakers in few states can make that claim, so until then, calls for higher taxes should be interpreted as begging to be spared the difficult—and absolutely necessary—job of prioritizing and cutting spending. In tough times, we all have to live within our means. It's not much to ask from government for it to merely do the same before coming back for another grab at our wallets.